The Salary Calculator

While we might be nearing the end of summer, it may be the case that you’ve not yet escaped for your summer holiday. After all, August is typically the most popular month for a getaway. If this is the case, or perhaps if you’re planning on taking an autumnal vacation abroad, it’s likely that exchange rates will be on your mind – or at least they should be.

Getting the most bang for your buck can really help you make the most of your getaway, and at The Salary Calculator, we’ll show you how.

Navigating foreign exchange rates

There are a total of 180 currencies that are recognised by the UN as legal tender, with the four most widely used being:

• The US dollar (USD),
• The Euro (EUR),
• The Japanese Yen (JPY) and
• Great British Pound (GBP).

They’re also fluctuating all the time, and different currency exchanges offer different rates. For this reason, it’s always important to see what’s out there depending on where you’re going and how much you’re looking to exchange.

The pound has seen some serious fluctuations in recent years, from the 31-year low following Brexit, hitting its lowest point against the US dollar since 1985, following the budget announcement by former Prime Minister Liz Truss and Chancellor Kwasi Kwarteng. However, 2023 is looking like the year the pound rebounds after ranking as one of the worst-performing currencies of 2022.

Right now, if you’re converting pounds into euro, one of the best rates for cash delivery for £500 is Eurochange, which offers 1 GBP = 1.149 EUR, or 1 EUR = 0.870 GBP. If you’re planning on travelling a little further afield to Australia, for example, and exchanging £400, Travel FX offers the best rates at 1 GBP = 1.886 AUD, or 1 AUD = 0.530 GBP. If you fancy trying some of the fancy Swiss chocolate in Switzerland, Currency Online Group is the right place for you to exchange £500, there you’ll get 1 GBP = 1.1063 CHF or 1 CHF = 0.904 GBP. Remember, this will differ depending on whether you get your money delivered or pick it up in person.

You can find out more about where you can find the best exchange rates by heading over here. 

Tips for getting the best rates and making your money go further

As we’ve noted, exchange rates vary widely depending on which currency exchange you choose and how much you’re exchanging, so in order to ensure you get the best rates, research is your best friend. Make sure to compare all different rates to ensure you get the most for your money.

According to Alon Rajic of MoneyTransferComparison, excessive exchange rate margins are still “very prevalent” among banks and some specialist providers. Indeed, Rajic noted that people still pay over a 5% markup on their currency exchanges – this, Rajic says, essentially removes benefiting from any of the “recent gains” made by the pound.

If using your card abroad, it’s also important to factor in foreign transaction fees. With foreign transaction fees, implemented by credit and debit card issuers and ATM networks, they are charged per transaction on purchases or withdrawals made overseas and vary between 2% to 3% of the purchase or withdrawal.

If you’re asking yourself whether using a cash machine abroad is better or worse than changing cash at the airport, we’re here to tell you that ATMs usually offer better exchange rates. The reason? Currency exchange stores and kiosks at the airports mark up the exchange rate for profit – so watch out! That said, you need to be wary because withdrawing cash from an ATM can see fees of almost 5%. It’s advised not to use Bank of Scotland, Lloyds Bank or TSB. These cards charge 50p to £1.50 for transactions on top of their normal exchange-rate charge, although spending euros in the EU, Iceland, Liechtenstein or Norway, is exempt.

Another thing to remember is to always choose to pay in local currency if using an overseas card.

It might also be worth getting a specialist travel credit or debit card, as this can give you ‘near-perfect’ exchange rates worldwide.

According to MoneySavingExpert, some of the best out there right now include:

• Barclaycard Rewards (top pick visa Credit card) – With this card you get interest-free withdrawals, and an ongoing 0.25% cashback.
• Chase (top pick Mastercard visa card) – This offers fee-free spending abroad and ATM withdrawals, and 1% cashback -although bear in mind that there’s a £1,500/month limit on ATM withdrawals.
• First Direct (top pick Mastercard debit card) -This offers fee-free spending abroad and ATM withdrawals, plus you’ll receive £175 if you switch over your existing bank account.

Finally, when researching, it’s advisable to look for a buy-back guarantee. This means that you’re guaranteed to keep the initial exchange rate, and there will also be no additional hidden costs.

Also, remember that if you use a bureau de change to exchange cash, and it goes bust while it has your money, you have no protection. A quick swap there and then is the best option to safeguard yourself against this potential risk.